Product counterfeiting is a problem of enormous proportions throughout most of the industrialized world. In many cases, products that appear to be branded by a particular company are in fact counterfeited imitations. Brands that appear on products serve to provide consumers with information regarding the source of the goods in question. Subsequently, consumers develop preferences for particular brands, which often may include a level of trust in the source of the products. Counterfeiters take advantage of this preference and trust to pass off what are often inferior goods, causing harm to both the manufacturer and the consumer. Manufacturers lose revenue from lost sales and any goodwill harm that occurs, and they often must repair and replace counterfeited items. In some cases, manufacturers may even be legally responsible for such goods. Consumers lose value due to inferior products that may potentially cause harm through defects. For example, counterfeited parts for planes and cars have been known to contain defects that have caused serious injury or death.
As another example, the pharmaceutical industry generates many billions of dollars in the United States each year. Given such a lucrative market, it is not surprising that counterfeiting of pharmaceuticals has become a widespread and rapidly growing problem. Several factors appear to contribute to this alarming growth of criminal activity, including the increased involvement of under-regulated wholesalers and repackagers in the drug supply chain; the recent growth of internet pharmacies; and the increased international importation of pharmaceuticals. As such, consumers of pharmaceuticals may be unaware that the drugs they are taking may not have been manufactured and packaged as indicated on the pharmaceutical packaging.
Such counterfeiting practices not only reduce income to pharmaceutical companies, but they also introduce potential health risks to the consumers of the drugs in question. The strict regulation process imposed on pharmaceutical companies by the FDA helps to ensure the quality and safety of a drug. Consumers purchasing imported counterfeit drugs may believe they are taking a pharmaceutical medicine that has been manufactured and distributed according to these strict FDA guidelines and thus be effective and safe, when in fact the drug may be ineffective or may cause potentially dangerous side-effects. Also, when health risks come to fruition in these cases, consumers have no recourse or remedy due to the illicit nature of parties providing the counterfeits.
One significant technological development that has contributed significantly to the rapid spread of most forms of product counterfeiting is the widespread availability of high quality, relatively inexpensive scanners, photo printers, and image editing software. It takes little skill for a counterfeiter to scan a product label, edit the resulting image to suit a particular need, and print a supply of counterfeit labels.
Numerous factors may help to reduce product counterfeiting. Efficient methods of tracking and tracing a product from its source of origin to its destination are helpful. In such a system, counterfeit items can easily be spotted and removed from the distribution chain. Also, efficient methods of authentication by the end user or distributor of the product would assist in the elimination of counterfeit products.
As such, it would be beneficial to provide a method for increasing the difficulty of producing counterfeited products, especially for those criminals that lack a high level of technological expertise. Additionally, by increasing the level of counterfeiting difficulty, it is hoped that even highly skilled criminals will lack the resources to create illicit merchandise.